Melbourne rents: suburbs where rental prices have jumped 37 per cent in 12 months

Tenants are getting asked to pay up to $150 more per week than they were a year ago in some of Melbourne suburbs, as apartment owners ‘play catch up’ to raise rates.

Melbourne suburbs have seen some huge spikes in rent over the past year. Picture: NCA NewsWire / Andrew Henshaw

Rental apartment owners in Melbourne suburbs worst hit during the Covid pandemic have been playing catch up by raising rents this past year, new figures show.

Median advertised rents in Melbourne’s CBD, West Melbourne, Southbank and Docklands climbed between $125 and $150 a week in the past 12 months to now sit between $520 and $575 a week, new PropTrack data shows.

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The apartment markets were the worst hit during the pandemic when international students returned home and other people turned their back on the city to avoid being cooped up during lockdowns.

PropTrack economist Angus Moore said owners were partly playing catch-up for decline in rents in order to entice tenants during lockdowns.

“Rents actually fell pretty substantially in those areas during the pandemic,” he said.

“In the Melbourne LGA, rents fell by in the order of a quarter across the 18 months from 2020 to 2021.”

Mr Moore said there is really strong demand for inner Melbourne properties, as Greater Melbourne’s rental vacancy rate is just 1.4 per cent.

The substantial dollar increases in those suburbs equalled between a 27 per cent and 37 per cent increase over 12 months.

Melbourne apartment rents plunged during the pandemic, and PropTrack economist Angus Moore says owners are ‘playing catch up’ to raise rents. Picture: NCA NewsWire / Luis Enrique Ascui

The impact of a shortage of homes saw asking rents for houses rise by a similar figure in inner east and south suburbs such as Caulfield, which rose by $150 to $850 a week, Kew, Albert Park, Malvern and Brighton.

The data shows the change in suburbs where a minimum of 30 homes were advertised for lease on realestate.com.au over 12 months.

Mr Moore said while the more expensive suburbs were expected to see the biggest value increases, rents in most of these suburbs were rising at double the pace of the wider city.

“The way to fix that is by bringing more supply into the rental market, which means more investors in the near term but even more importantly, in the long term, building more homes to increase the number of homes that can be rental properties,” Mr Moore said.

PropTrack economist Angus Moore.

The data recorded the last price advertised for a property on realestate.com.au, but didn’t reflect changes to rents for people who were already on a lease.

“What advertised rent tells you is not necessarily how much extra everyone is paying, but how much you would have to pay if you wanted to go out and find a rental today,” Mr Moore said.

“We are seeing with very few exceptions, a very limited stock on market for renters to choose from. That’s reflected in vacancy rates, which are extremely low across right across Melbourne.”

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Originally published as Melbourne rents: suburbs where rental prices have jumped 37 per cent in 12 months